What Now for Joy Global (Nasdaq:JOYG), Komatsu (OTC:KMTUY.PK), After Caterpillar (NYSE:CAT) Acquisition of Bucyrus (Nasdaq:BUCY)?

There is no doubt the announced acquisition of mining equipment-maker Bucyrus (Nasdaq:BUCY) by Caterpillar (NYSE:CAT) has dramatically changed the sector, and major competitors like Joy Global (Nasdaq:JOYG) and Komatsu (OTC:KMTUY.PK) have a challenge on their hands against a company that now will be able to compete in almost every aspect of mining machinery at a time the market is expected to generate increasing demand for years.

The obvious question is whether the rest of the industry will make moves to consolidate in light of the merger between Caterpillar and Bucyrus in order to generate larger scale and diversity of product lines.

Joy Global will compete against Caterpillar in the lines carried by Bucyrus, belt systems, surface drills and draglines, while Komatsu will compete against the existing line of Caterpillar, including trucks dozers, wheel loaders and excavators.

Those two companies will probably be watched closely for hints they, or others, may be ready to grow through merger and acquisition.

As for the underlying importance of the move by Caterpillar, it shows they are convinced the mining sector has a long and prosperous rode ahead of it, and now they are positioned strongly to be a major player in providing the tools needed for the industry to be successful.